How to keep your financial and personal records in order?

Your records are a history of your family’s financial and personal growth. Financial records should be organized so that they will be useful at income tax time.

Keep an active file (in a file drawer, an accordion file, or a carton) for papers that you accumulate and need during the current year, records needed for taxes; current car, homeowner’s, medical, and personal-property insurance policies: credit- and charge-account statements; employee benefit data; employment and education records; mortgage and other papers related to the home; installment purchase and loan papers; resumes; records of income earned from rental properties; warranties and instruction manuals for appliances.

At the year’s end, assemble the papers you will need for tax purposes, throw out dead matter, and divide what remains into what should stay in the active file and what can be put in storage.

For long-term storage youe file should contain past tax matters and supporting documents (which must be kept for 4 years), such as bank statements and most of the papers from your active file. Keep old homeowner’s and automobile insurance policies until your state’s statute of limitations runs out.

Use a fireproof strong box, a safe, or a bank safe-deposit box for important, difficult-to-replace documents: birth certificates; marriage licenses; divorce records: passports; social security cards; copies of wills; burial records; life insurance policies; stocks, bonds, and other securities; trust documents; property deeds, titles, and surveys; title to the car: IOU’s; IRA or Keogh records.